205 ILCS 205/6003

Current through Public Act 103-1052

Section 205 ILCS 205/6003 - Other investments

A savings bank may invest funds as provided in this Section:

(1) In demand, time, or savings deposits or accounts, withdrawable accounts, or other insured obligations of any financial institution the accounts of which are insured by a federal agency.

(2) In participating interests in loans of a type that the savings bank would be authorized to make, but only if the other participants are

(A) savings banks organized under this Act,

(B) savings and loan associations, banks, credit unions, and licensees under the Consumer Installment Loan Act or the Sales Finance Agency Act, organized under the laws of this State,

(C) associations or corporations insured by an instrumentality of the United States,

(D) instrumentalities of or corporations owned wholly or in part by the United States or this State, or,

(E) subject to regulations of the Commissioner, service corporations of a savings bank organized under this Act or subsidiaries of a savings and loan association, bank, or credit union organized under the laws of this State or the United States.

(3) In obligations of, or obligations that are fully guaranteed by the United States and in stocks or obligations of any Federal Reserve Bank, Federal Home Loan Bank, the Student Loan Market Association, the Government National Mortgage Association, the Federal National Mortgage Association, The Federal Home Loan Mortgage Corporation, the Federal Deposit Insurance Corporation, or any other agency of the United States.

(4) In bonds or other direct obligations of, or guaranteed as to principal and interest by, this State.

(5) In obligations that by the laws of this State are made legal investments for savings banks.

(6) In bonds or other evidences of indebtedness that are direct general obligations of any unit of local government of this State or in bonds or other evidences of indebtedness that are payable from revenues or earnings specifically pledged therefor of a unit of local government, but in no event shall the total amount of the securities of any one maker or obligor exceed 15% of the savings bank's total capital, nor shall the aggregate amount of investments under this paragraph exceed 15% of the savings bank's total assets.

(7) Equity investments in real estate. With the prior written consent of the Commissioner, a savings bank may invest in the initial purchase and development, or the purchase or commitment to purchase after completion, of home sites and housing for sale or rental, including, but not limited to, projects for the reconstruction, rehabilitation, or rebuilding of residential properties to meet the minimum standards of health and occupancy prescribed by appropriate local authorities, the provision of accommodations for retail stores, shops, and other community services that are reasonably incident to that housing or in the shares of a corporation that owns one or more of those projects and that is wholly owned by one or more financial institutions whose investments are regulated by the laws of this State or of the United States. In no event shall the total investment in any one project exceed 15% of the savings bank's total capital, nor shall the aggregate investment under this paragraph exceed 50% of its total capital. No savings bank may make an investment of this type unless it is in compliance with the capital requirements of this Act and with the capital maintenance requirements of its insurer of deposit accounts. The Commissioner shall approve the investment only if the savings bank shows:

(A) that the savings bank has adequate assets available for the investment;

(B) that the proposed investment does not exceed the reasonable market value of the property or interest therein as determined in accordance with the appraisal requirements of this Act; and

(C) that all other requirements of this Section have been met.

Nothing contained in this paragraph prohibits a savings bank from developing or building on land acquired by it under any other provision of this Act nor from completing the construction of buildings in accordance with any construction loan contract where the borrower has failed to comply with the terms of the contract.

(8) In obligations of the State of Israel or obligations fully guaranteed by the State of Israel as to payment of principal and interest, but in no event shall the total amount of that investment exceed 15% of the savings bank's total capital.

(9) In stocks or obligations of business development corporations chartered by this State or by the United States or an agency thereof, but in no event shall the aggregate amount of stock exceed 2.5% of the savings bank's total capital or $250,000, whichever is greater.

(10) In obligations of urban renewal investment corporations chartered under the laws of this State, or the United States, or in certificates of beneficial interest of urban renewal investment trusts, but in no event shall the aggregate amount of the stock, obligations or beneficial interest certificates of any one maker exceed 2.5% of the savings bank's total capital, nor shall the aggregate amount of investments under this paragraph exceed 15% of its total capital.

(11) Subject to the regulations of the Commissioner, in loans deemed sufficiently secured by the board of directors of the savings bank. However, if the security is stock or equity securities of any kind other than those of a financial institution, the stock or securities must be listed on a national exchange or actively traded and quoted on an over-the-counter market or their value must be ascertainable in accordance with regulations promulgated by the Commissioner.

(12) In commercial paper. As used in this Section, the term "commercial paper" means short term obligations having a maturity ranging from 2 to 270 days issued by banks, corporations, or other borrowers. Investments in commercial paper under this Section must be in securities rated in one of the 4 highest categories by a nationally recognized rating service.

(13) Purchase of stock in insurance companies. Notwithstanding any provision of this Act to the contrary, a savings bank may purchase shares of, or otherwise acquire equity interests in, insurance companies and insurance holding companies organized to provide insurance for savings institutions and corporations and individuals affiliated with savings institutions, provided ownership of equity interests is a prerequisite to obtaining directors and officers' and blanket bond insurance through the company or companies. The Commissioner may promulgate regulations concerning the size of each savings bank's investment and manner of holding those investments.

(14) Subject to the regulation of the Commissioner, in equity or debt securities or instruments of a service corporation subsidiary of the savings bank.

(15) Through advances of federal funds to designated depositories, provided that the advances are made on the condition that they be repaid on the next business day following the date on which the advance is made. For the purposes of this paragraph, the term "federal funds" means funds that a savings bank has on deposit at a depository that are exchangeable for funds on deposit at a federal reserve bank; the term "business day" means any day on which the savings bank, the depository, and the federal reserve bank where the funds are on deposit are all open for general business.

(16) In financial futures or options transactions subject to the regulations of the Commissioner.

(17) In a subsidiary chartered for the purpose of exercising all powers necessary to act as a corporate fiduciary under the Corporate Fiduciary Act.

(18) In marketable investment securities, but in no event shall the total amount of those securities of any one maker or obligor exceed 15% of the savings bank's total capital nor shall the aggregate amount of investments under this Section exceed 15% of total assets. As used in this Section, the term "marketable investment securities" does not include stocks, but means investment grade marketable obligations evidencing indebtedness of any person in the form of bonds, notes, or debentures commonly known as investment securities, and of a type customarily sold on recognized exchanges or traded over the counter and investment grade marketable obligations of the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank, the African Development Bank, or the International Finance Corporation. As used in this Section, the term "investment grade" means being rated in one of the 4 highest categories by at least one nationally recognized rating service.

(19) In investment grade marketable obligations of any other state, territory, or possession or political subdivision thereof to the same extent that it may invest in marketable investment securities under paragraph (18) of this Section.

205 ILCS 205/6003

P.A. 89-317, eff. 8/11/1995; 90-665, eff. 7/30/1998.